Description

Mexico Consumer Electronics Report Q2 2016 Description

BMI View: We have left our core forecasts unchanged for the Mexican consumer electronics market in ourQ216 report update. We hold the opinion that the consumer electronics market will move to a muchstronger footing in 2016 with growth of 7.8% forecast - a turnaround from the contraction in spending in2015 when peso depreciation eroded Mexican household purchasing power for imported devices. We expectthe PC and AV markets to benefit most from the improved economic backdrop as deferred purchases from2015 are unlocked. Over the medium term, income growth will increase the spending potential ofhouseholds, both deepening the market by adding new entrants and by reducing the price sensitivity thatcharacterised the mass market in 2015 - and therefore offering vendors the opportunity to increase volumesand sell a greater share of higher-margin devices. BMI forecasts that total consumer electronics devicespending will increase to a total of USD19.6bn in 2020.

Latest Updates & Industry Developments

Computer Hardware Sales: USD6.6bn in 2016 to USD9.2bn in 2020. Household income growth willunderpin robust expansion of PC market in value and volume terms, while enterprise hardware spendingexpected to accelerate as business sentiment strengthens.

AV Sales: USD2.6bn in 2016 to USD3.3bn in 2020. Digital TV set upgrades and LED/LCD spendinggrowth will drive AV spending over the medium term as price sensitivity is alleviated in the mid-market.

Handset Sales: USD6.1bn in 2016 to USD7.1bn in 2020. Handset segment spending growthoutperformed from 2010-2015, but as the smartphone boom loses momentum and competition fromChinese vendors ensures a dynamic of price erosion we expect growth rates to be more subdued over2016-2020.